General Insurance Concepts (Health)
What documentation grants express authority to an agent
Agent's contract with the principal
An individual was involved in a head on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk management does this describe?
Avoidance
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
Consideration Consideration is something of value that each party gives to the other. The consideration on the part of the insured is the payment of premium and the representations made in the application.
The authority granted to an agent through the agents contract is referred to as
Express authority: express powers are written into the contract between the insurer and the agent
In insurance transactions, fiduciary responsibility means
Handling insurer funds in a trust capacity
If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?
Reasonable expectations
In case of a loss, the indemnity provision in insurance policies
Restores an insured person to the same financial state as before the loss
Events in which a person has both the chance of winning or losing are classified as
Speculative risk
Which of the following is not the consideration in a policy?
The application given to a prospective insured
Which of the following is not a characteristic of an insurable risk?
The loss must be catastrophic
In Forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?
morale meaning they are careless or irresponsible because they know his loss will be covered by insurance
A situation in which a person can only lose or have no change represents
pure risk